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The “Silk City”

It is a city conceived and created by one of the most famous Americans in history.  He is perhaps even more well known today than ever following the success of the eponymous Broadway show “Hamilton” created by Lin-Manuel Miranda.  Yet it is a city that surprisingly few New Jersey residents know much about.  The city is Paterson, located in Passaic County and founded by none other than the great Alexander Hamilton, who decided to make Paterson the first industrial planned community in the United States.  The city was named after the second Governor of the State of New Jersey, William Paterson, a lawyer and a jurist who was a signer of the US Constitution.  

Many of the cities that have workers’ compensation courts have experienced tremendous economic growth in the last two decades, including Jersey City, Newark, Camden, New Brunswick and others.  Paterson is a poor city.  Families have half the state average annual income, but the city may be on the verge of its own renaissance. The third largest city in the state, Paterson was founded in 1792 by Alexander Hamilton.  He could foresee what the Paterson Great Falls and its hydroelectric power could mean in developing much needed manufacturing in the United States.  Hamilton was a visionary. He and others who founded the “Society for Establishing Useful Manufactures” (S.U.M.) were in fact prophetic.  With the help of the S.U.M., Paterson did become a manufacturing powerhouse in the 19th century, manufacturing silk, locomotives, paper and firearms.  It was known for decades as the leading manufacturing center in the United States for silk:  hence the moniker, the “Silk City.”   It fell on harder times in the mid-20th century. 

As far as workers’ compensation courts go, Paterson is the only New Jersey comp court which is a few blocks from a National Park.  The Paterson Great Falls is part of the National Park System, and the Falls are the second largest by volume of water east of the Mississippi.  The waterfall views are simply spectacular.  More and more visitors come to see the Falls, and they visit the nearby Paterson Museum which displays the industrial history of the city, Garret Mountain Reservation, Lambert Castle and the recently renovated Hinchliffe Stadium.  All of these sites are close to workers’ compensation court.  On one visit I made to the Falls in 2017, a bus from a private school in Lakewood, N.J. brought high school students to the Falls.  I spoke with some of the students, and they were astounded that such a beautiful national park and falls were located in the center of North Jersey.

One of the strengths of the city is that it has great diversity with a large Latino community, black community, white community, and the largest Middle Eastern community in New Jersey, which is centered in South Paterson.  In fact, the Mayor of Paterson is of Middle Eastern heritage.  Each generation of immigrants that has settled in Paterson has left its mark over the centuries.  More residents of New Jersey and visitors to the state need to know about the unique history of Paterson.  They need to know about the many great Americans who lived or worked in the city, including Lou Costello, the famous comedien; Allen Ginsberg, a highly acclaimed poet raised in Paterson; Larry Dobe, who grew up in Paterson where he played high school baseball and along with Jackie Robinson helped break the color barrier in baseball while playing in the American League;  Michael Jace, a very talented actor, and William Carlos Williams, an immensely talented writer and poet who wrote the poem “Paterson,”  which consists of five books published between 1946 and 1958.  There are many, many more famous Patersonians.

From a personal standpoint, I am rooting for the Paterson renaissance, as my mother and her family lived in the city, my sisters were all born at St. Joseph’s Hospital, my father worked there for 40 years, in fact co-founding what was then the largest law firm in Passaic County located in 100 Hamilton Plaza, site of the present workers’ compensation court, and my grandfather was a Superior Court Judge in Paterson. 

If you have read this far, at this point you have undoubtedly begun to wonder, “John, what does this blog have to do with workers’ compensation anyway?”  Well, at first glance perhaps not much but maybe more than you might think.  There are only 15 venues where workers’ compensation cases are heard, and each court is located in a city or municipality with its own interesting and developing history.  The Division judges, court personnel, security professionals, thousands of lawyers around the state, adjusters, translators, stenographers, petitioners, respondents and many doctors regularly work in or visit the 15 workers’ compensation courts. They park their cars there, buy coffee there, make friends there, shop there, and dine in restaurants there. They may become in time part of the fabric of the communities that host the 15 workers’ compensation courts in the state.

One could say that we in the world of workers’ compensation play a small role individually but a larger role collectively in contributing to each of the cities and municipalities where the Division carries out its vital business.  As for the City of Paterson, don’t forget to put it on your bucket list. 

The post The “Silk City” appeared first on NJ Workers' Comp Blog.

Notable Win: Bjourn Avery v. Next Mile, LLC/DSP

Client:  Next Mile LLC 

Court: Workers’ Compensation 

Trial Attorney: Ashley T. Mollenthiel Fiore, Esq.

Brief Attorney: Brian P. Berkoff, Esq. 

**Results may vary depending on your particular facts and legal circumstances**

In Claim Petition No. 2020-31237, the petitioner while sitting on the rear bumper of his truck, was shot by a gun and had sustained orthopedic and neurological injuries. Respondent filed an Answer asserting a general denial to the allegation of the claim petition and putting the petitioner to his proofs on all issues.

The basis for respondent’s denial was that this shooting did not arise out of the petitioner’s employment. Rather, it was respondent’s position that petitioner was personally targeted and shot for reasons unrelated to his employment and that it was as likely the shooting could have occurred during everyday life.  To address the issue of compensability, Judge Thuring commenced bifurcated trial to determine whether or not the alleged incident arose out of and in the course of the petitioner’s employment for respondent, Next Mile.

After a grueling cross-examination of the petitioner, the respondent was able to prove to the Court that the facts did not contain any evidence whatsoever causally relating the shooting to the Petitioner’s employment with the Respondent.  Petitioner testified that he had no issues with an alleged former co-worker while they were both working for Respondent, yet a few minutes prior to the alleged shooting, he conceded that he got in an argument with the former co-worker regarding the purchase of seemingly illegal credit cards. Furthermore, the respondent successfully argued that the shooting appeared to have been a targeted act and was just as likely to have occurred outside the workplace.

The Judge of Compensation found that it was more likely than not that the shooting was related to the credit card purchase from petitioner’s former co-worker.  Even if the shooting was unrelated to this card purchase scheme, the record was still void of any evidence connecting the incident to the Petitioner’s employment with the Respondent. Accordingly, the Judge of Compensation found that the injury did not arise out of the Petitioner’s employment with Respondent and is therefore not compensable. An Order for Dismissal with prejudice was entered due to lack of compensability.

Wayne Demo v. Holman Enterprises

Client: Holman Enterprises

Court: Workers’ Compensation

Trial Attorney: Claire Y. Ringel, Esq. 

**Results may vary depending on your particular facts and legal circumstances**

The petitioner had three claim petitions filed including two denied occupational exposure claims. He eventually filed a Second Injury Fund petition alleging total and permanent disability. The respondent obtained extensive surveillance showing petitioner working at a shore restaurant on multiple days as well as being active gardening outside of his house.

The respondent filed a motion to dismiss due to fraud. Judge Gallagher granted our motion and ordered that all three claim petitions be dismissed due to fraud.

Capehart Scatchard BOWLS FOR THE KIDS

PHOTO L to R:  Maura Burk, Alexis Rose, Keith Nagy, Morgan Pyle, Nicholas Stephens, Daniel Klementowski, Brian Berkoff, Ashley Mollenthiel Fiore, Michael Bileci, McKenna Parris, John Pszwaro and John Geaney.

Attorneys from Capehart Scatchard’s Workers’ Compensation Department recently participated in the Eighth Annual Kids’ Chance of New Jersey’s Bowl for the Kids Event. The fundraiser, held at Colonial Bowling on March 2, 2023 in Lawrenceville, was organized to raise money for Kids’ Chance, Inc., a non-profit organization, created to provide educational opportunities and scholarships for the children of workers who were fatally or catastrophically injured on the job.

A Practitioner’s Guide to Prior Injuries and Credits

Practical Advice in New Jersey Workers’ Compensation

Pursuant to N.J.S.A. 34:15-12(d), “if previous loss of function to the body, head, a member or an organ is established by competent evidence, and subsequently an injury or occupational disease arising out of and in the course of an employment occurs to that part of the body, head, member or organ, where there was a previous loss of function, then the employer or the employer’s insurance carrier at the time of the subsequent injury or occupational disease shall not be liable for any such loss and credit shall be given the employer or the employer’s insurance carrier for the previous loss of function and the burden of proof in such matters shall rest on the employer.”

Essentially, this provision provides that if an employee has a prior relevant injury which resulted in prior loss of function to the same body part injured in the work injury, Respondent is entitled to a credit (which results in money off the overall Award) for the prior injury or pre-existing disabling medical condition. Of particular note, the burden rests on Respondent to demonstrate and prove a prior injury and prior loss of function. Proper medical and factual discovery and investigation is extremely important in this regard, as evidence of prior functional loss can save Respondent from incorrectly paying for, and assuming liability for, pre-existing issues.

Respondent must demonstrate through medical discovery and medical records that the employee has a prior, relevant medical issue and that the prior issue was disabling in order to successfully argue for a credit. It is most helpful when an accurate and detailed history is taken from the employee at the outset of treatment following a work injury.

In some situations, the credit entitlement is easier to demonstrate, and not all prior issues are necessarily applicable to Respondent’s credit entitlement.

Below are hypothetical situations where Respondent may, or may not, be in a position to argue for a credit on permanency.

Scenario 1: Robert has a work injury of January 1, 2022 to the lumbar spine and a lumbar spine MRI shows herniations at L3-L4 and L4-L5. Robert has a prior workers’ compensation Award for 15% partial total from a work accident of January 5, 2019 for the lumbar spine for a bulge at L4-L5.

Here, Respondent is entitled to a credit for the prior bulge at L4-L5. The credit is likely to be 15% partial total for this aspect/ level of the case, as the prior workers’ compensation Award was for 15% partial total for the lumbar spine for a bulge at L4-L5.

This can result in significant savings to Respondent, as for example, an Award of 30% partial total at 2022 rates is $62,568.00. An Award of 30% partial total, credit 15% partial total is $37,026.00.

Scenario 2: Charlie has a work injury of January 1, 2022 to the lumbar spine and a lumbar spine MRI shows herniations at L3-L4 and L4-L5. Robert has a prior non-work related injury to the lumbar spine, and a prior MRI revealed a prior bulge at L4-L5.

This is similar to Scenario 1, other than the fact that Charlie’s prior injury was not work related, and there is no prior workers’ compensation Award for this prior injury. However, Respondent is still entitled to a credit, which is somewhat more negotiable than the credit applied in Scenario 1, for Charlie’s prior issues in the lumbar spine and at L4-L5.

Scenario 3: Peter has a work injury of February 14, 2022 where he injures his right shoulder, neck, and right arm. Prior to the work injury, on December 24, 2021, petitioner underwent a right shoulder surgery. Other than the prior right shoulder surgery, petitioner has had no prior medical issues or injuries.

Here, Respondent is entitled to a credit as to the right shoulder aspect of the claim. Regarding the neck and right arm, if Peter truly has no relevant prior history, Respondent is not entitled to a credit for these aspects of the claim.

Employers should keep in mind that potential credit entitlement can depend on a number of factors including length of time since any prior injuries or issues, strength of any medical evidence documenting prior issues, and prior functional loss. There does not need to be a prior workers’ compensation Award, or any prior settlement, for Respondent to successfully argue for a credit entitlement.

However, it remains important to be sure that prior discovery, medical records, information, and investigation obtained by Respondent is provided to Respondent’s medical experts and examiners so that the defense experts can properly assess prior issues and accurately apportion treatment/ permanency to the accident and to pre-existing issues, if applicable. It is also important for Respondent’s experts need to take a detailed history of the employee during the examination in order to determine any pre-existing issues and properly assess causation. Without a medical expert opining as to the existence of pre-existing issues and their current disabling effect, it can be much more difficult to argue for a credit. Providing the discovery to Respondent’s experts is just as important as Respondent obtaining the discovery. In order to successfully argue for a credit for a prior issue, in most cases, Respondent needs to proffer a medical opinion discussing the pre-existing disabling injury or medical issue.

Supreme Court Finds Non-Waivable Duty on the Part of Insurance Brokers to Provide Notice of Available Coverage for LLC Members

When coverage is denied under a workers’ compensation policy for an LLC, one can be almost certain that a finger will be pointed, rightly or wrongly, at the insurance broker.  The more severe the injury, the more likely the potential for a civil suit.  This was the situation in last month’s decision in Holm v. Purdy, New Jersey Supreme Court No. A-39-21 (Dec. 13, 2022).  Brokers will be interested in this case because it is a case of first impression and will change procedures with respect to those who work with members of an LLC.

The case arose from the death of member of an LLC.  As many know, an LLC must elect to obtain coverage for its members.  Otherwise, there is no workers’ compensation coverage for the members of the LLC.  The employees of an LLC, of course, are covered under workers’ compensation.

Holmdel Nurseries LLC had two members, Robert and Walter Friedauer, brothers in the business. Robert’s sons, Michael and Christopher, became full-time employees in the business after college.

When workers’ compensation coverage first became available in New Jersey for members of an LLC, Holmdel Nurseries elected to obtain coverage for Robert and Walter. Sometime later, the LLC decided against renewal of coverage due to the cost of workers’ compensation insurance.

For many years, the brothers retained Daniel Purdy as the broker for the LLC and for themselves personally.  When the LLC decided against maintaining workers’ compensation coverage for themselves as members, the policy stated, “Workers’ Compensation Members Excluded.”

In the Spring of 2012, Michael Friedauer and Christopher Friedauer purchased Walter Friedauer’s 50% interest in Holmdel Nurseries.  The sons were no longer employees in the business but now members of the LLC.  On July 12, 2012, a company meeting took place.  Purdy said he learned for the first time that Michael and Christopher were no longer employees and had become members of the LLC.  He admitted that he did not tell the sons that they were no longer covered under workers’ compensation by changing status from employees to members.  Nor did he tell the brothers that the LLC could elect to purchase workers’ compensation insurance for them.

On February 15, 2015, tragedy struck.  Michael Friedauer encountered his brother at the nursery.  He was covered in snow and appeared not to be himself.  Christopher said he had fallen and hit his head.  Christopher told his brother than he fell so hard that he saw stars.  Michael later that day looked for his brother and found him sitting dead in a truck on work premises.  Christopher’s wife filed a dependency claim petition on her behalf and on behalf of her two children asserting that her husband’s death arose from work.  The workers’ compensation carrier denied coverage as the LLC had not elected to provide coverage for the members.

A civil suit was filed by Christopher Friedauer’s widow against the broker Purdy asserting an act of professional negligence.  Robert and Michael Friedauer asserted that they did not know that they were not covered as members for workers’ compensation purposes and said that they would have elected coverage had they known it was available.

The trial court ruled against the widow and held that the broker had no duty to inform members of their right to elect workers’ compensation coverage. The Appellate Division reversed and the Supreme Court took certification. 

The starting point for the Supreme Court was an analysis of N.J.S.A. 34:15-36:

Notwithstanding any other provision of law to the contrary, no insurer or insurance producer . . . shall be liable in an action for damages on account of the failure of a . . . limited liability company . . . to elect to obtain workers’ compensation coverage for a . . . limited liability company’s members . . . unless the insurer or insurance producer causes damage by a willful, wanton or grossly negligent act of commission or omission. . .

The Supreme agreed with the conclusion of the Appellate Division and held:  “In accordance with N.J.S.A. 34:15-36, we hold that an insurance broker for an LLC, charged by the LLC to obtain workers’ compensation coverage on its behalf, has a non-waivable duty to provide notice that such coverage is available to LLC members who can actively perform services on behalf of the LLC – but that such coverage is available only if the LLC elects the coverage when the policy is purchased or renewed. Because it is foreseeable that the failure to provide such notice may harm an LLC member’s dependents, the broker’s duty extends not only to the LLC, but also to LLC members eligible for workers’ compensation coverage under N.J.S.A. 34:15-36.”

The Supreme Court remanded the matter to the trial court to determine whether the defendant ‘caused damage by a willful, wanton, or grossly negligent act of commission or omission.’

The post Supreme Court Finds Non-Waivable Duty on the Part of Insurance Brokers to Provide Notice of Available Coverage for LLC Members appeared first on NJ Workers' Comp Blog.

A Practitioner’s Guide to “Arising Out of Employment and Occurring In the Course of Employment”

Practical Advice in New Jersey Workers’ Compensation

Practitioners and employers will often hear the phrase, “arising out of and in the scope of (or course of) employment.” This phrase encompasses two separate concepts: 1. Occurring in the course of employment, which refers to when the injury occurred and if it occurred at work; and 2. Arising out of employment which refers to causation and how the injury occurred and if work, and the employee’s employment and work, was a causative factor of the injury.

Sometimes there are instances where an injury may occur during work or arise out of work, but not both. An injured employee must prove both. Below are hypothetical situations where Respondent may have a good argument that the injury is not compensable as the injury does not arise out of AND occur in the course of employment.

Scenario 1: Peter, a cashier, is walking an item back to a shelf. As he is walking, his knee locks up. He does not trip or fall to the ground but he does sustain a knee sprain.

Here, there is a good argument that this injury did not arise out of employment. This is outlined in Meuse v. Egg Harbor Township Police Department, No. A-4553-90T5 (App. Div. May 6, 1992), where the Appellate court found that petitioner’s knee could have buckled at any time and it was a coincidence that the knee buckled at work. Therefore, as the work conditions had nothing to do with the knee injury, the injured worker was not entitled to benefits.

If Scenario 1 changes just slightly to a situation where something at work causes the injury, the outcome can be quite different.

Scenario 2: Peter, a cashier, is walking an item back to a shelf. As he is walking, his knee locks up. He falls to the ground, and his elbow hits a shelving unit, as well as the linoleum floor as he hits the ground and he sustains an elbow fracture from the impacts.

Here, the injured worker has a stronger argument that this is compensable as the shelving unit and the linoleum floor at work were what ultimately caused petitioner’s injury to his elbow. The employer should rely on George v. Great Eastern Food Products, 44 N.J. 44 (1965) and maintain that it is only responsible for any injury to the elbow caused by the shelf and floor at work, not any injury to the knee, which was not caused by anything at work.

Scenario 3: Tony and Rick are co-workers and are working a shift together. Tony’s life-long personal enemy, Fred, comes to their place of employment and punches both Tony and also punches Rick, who was standing in between Tony and Fred.

As to Tony, this injury does not arise out of the scope of employment, pursuant to Pittel v. Rubin Bros. Bergen, Inc., 59 N.J. Super. 531 (App. Div. 1960). While this injury did occur at work, the injury stemmed from a personal relationship that had nothing to do with work. However, as to Rick, this injury does arise out of the scope of employment. Fred had no outside personal relationship with Rick, so this attack was not personal and did arise in the scope of employment and it also arose out of employment.

Scenario 4: Tom has pre-existing high blood pressure. While attending a work meeting, he feels sudden chest pain. He is diagnosed with a myocardial infraction.

Here, the cardiac event occurred at work but was not caused by work, as Tom was just attending a meeting when the heart attack occurred. This injury did not arise out of work.

Employers should keep in mind that an injury must both arise out of and occur during the course of employment to be accepted as compensable. Injuries which are caused by a personal risk, or personal relationship, are not compensable under our statute.

Appellate Division Vacates Penalties and Fees Against Employer Pending New Hearing

In Saiti v. Garden Homes, No. A-1328-20 (App. Div. October 11, 2022), the petitioner received an award for $66,074 on September 3, 2020.  The terms of the settlement were memorialized in an order signed by the Judge of Compensation and both parties. Petitioner’s attorney made numerous phone calls in the ensuing 60 days regarding non-payment of the order.  After 60 days, petitioner moved to enforce the Order since payments still had not been made.  Over 90 days after the Order was entered, a telephone conference occurred on December 7, 2020 regarding the late payment.  There was no record of the conversation and no record of any oral argument by the parties, although there is mention that the parties appeared.

On December 7, 2020, the Judge of Compensation issued an oral decision on petitioner’s motion, noting that the payments were now due over 90 days.  The Judge of Compensation ordered:

  1. Costs and interest on the settlement payments;
  2. An additional assessment of 25% of the monies due for the unreasonable payment delay to the petitioner with $16,287 payable to Saiti;
  3. $4,000 in attorneys’ fees payable to counsel for Saiti;
  4. $5,000 in penalties payable to the Second Injury Fund;
  5. Additional legal fees of $2,188 to counsel for Saiti in relation to enforcement efforts.

Respondent appealed the December 7, 2020 Order and argued that the Judge of Compensation abused his discretion in awarding penalties and sanctions without affording counsel the opportunity to be heard. 

The Appellate Division observed, “The Workers’ Compensation Act does not establish a specific timeframe for payment of workers’ compensation settlement proceeds.”  That statement is puzzling because N.J.S.A. 34:15-28 states as follows: “Whenever lawful compensation shall have been withheld from an injured employee or dependents for a term of 60 or more days following entry of a judgment or order, simple interest on each weekly payment for the period of delay of each payment may, at the discretion of the division, be added to the amount due at the time of settlement.” While this statute gives the Judge of Compensation some discretion, it also clearly refers to a 60-day time period.

The Appellate Division held, “Having reviewed the parties’ arguments in light of the record and the applicable legal principles, we are unable to determine whether the imposition of penalties and assessments under the December 7, 2020 order was reasonable.”

The Court held, “We are satisfied that it was a mistaken abuse of discretion to enter an order awarding sanctions without permitting counsel to be heard and without findings as to why the payment delay was unreasonable.”

The Court directed that the Judge of Workers’ Compensation “shall conduct a hearing and consider the steps taken by Saiti’s counsel to secure payment within sixty days of the entry of the September 7, 2020 order.” The Order was vacated pending a new hearing.  The case seems to turn on procedural due process, namely the need for the Judge of Compensation to hear oral arguments on the reasonableness of the delay, specifically whether the delay in payment had some justification.

This decision provides no comfort for respondents.  It is true that the December 7, 2020 Order was vacated, but a new hearing will be held in which the Judge of Compensation will hear oral arguments from defense counsel explaining the reason, if any, for delays in paying the Order of September 3, 2020.   The best advice to employers remains this:  all orders need to be paid within 60 days.  That is the clear import of the relevant statute.

Advice to Employers In Dealing With Potential Fraud

Practical Advice in New Jersey Workers’ Compensation

N.J.S.A. 34:15-57.4 (commonly known as the Workers’ Compensation Fraud Act) states in pertinent part: “If a person, purposely or knowingly makes, when making a claim for benefits pursuant to R.S. 34:15-1 et seq., a false or misleading statement, representation or submission concerning any fact which is material to that claim for the purpose of obtaining the benefits, the division may order the immediate termination or denial of benefits with respect to that claim and a forfeiture of all rights of compensation or payments sought with respect to the claim.”

This means that both past and future benefits may be forfeited as a result of fraud (past benefits generally being medical and TTD, and future benefits generally being potential permanency benefits).

The Fraud Act goes on to state: “[I]n addition to any other remedy available under law, if that person has received benefits pursuant to R.S. 34: 15-1 et seq. to which the person is not entitled, he is liable to repay that sum plus simple interest to the employer or the carrier … and the division shall issue an order providing for the repayment …” N.J.S.A. 34:15-57.4(c)(2).

The Fraud statute sets a very high burden of proof for Respondents, as Respondent needs to demonstrate: 1. A false or misleading statement was made by petitioner; 2. The false statement must be material to the claim; and 3. The false or misleading statement was made for the purpose of obtaining benefits in the workers’ compensation case.

Below are hypothetical situations where Respondent may have a good argument that an employee committed fraud, and should consider filing a Motion to Dismiss for Violation of the Fraud Act.

Scenario 1: Tom is under authorized treatment for a January 1, 2022 work accident where he injured his low back and left shoulder. The authorized doctor placed petitioner out of work as of January 25, 2022. Petitioner is receiving TTD as he is out of work and he continues to deposit his TTD checks but at the same time, he continues to work as a delivery driver for a food delivery company and is paid from his second job as a delivery driver at the same time he receives TTD from his first job.

Our position is that this is fraud. An injured worker cannot collect TTD for not being able to work but actually be working. In this example, petitioner is representing that he cannot work but is working and therefore, he is making a fraudulent representation.

Scenario 2: During testimony on a Motion for Med/ Temp, Ryan testifies that due to his April 15, 2022 work injury, he cannot walk more than one block. He also cannot do any household chores and testifies that he has had to hire a housecleaning service. However, surveillance shows Ryan performing in triathlons and marathons, winning awards for being in second and first place in various events. He is also seen working on his home and building an addition to his back patio.

As Ryan has grossly exaggerated his abilities, our position would be that this is fraud. Misrepresenting of abilities to this degree is similar to the case of DuBrel v. Maple Crest Auto Group, No. A-3321-10T3 (App. Div. January 30, 2012), where petitioner testified that he could no longer do a variety of things, including training and trailering horses. However, petitioner was observed doing these activities, in direct opposition of his testimony. The court in this case found that this type of false testimony was a flagrant violation of the Workers’ Compensation Fraud Act. The Appellate Division affirmed the decision of the Judge of Compensation in terminating all benefits.

Scenario 3: Mary has a work accident of March 1, 2022, where she injures her left knee. During her course of authorized treatment, she specifically denies any prior left knee issues, injuries, or treatment. However, Respondent’s investigation reveals that on January 2, 2022, petitioner underwent arthroscopic surgery to the left knee. She then underwent a course of post-operative physical therapy through February 15, 2022 and treated with her prior surgeon through February 28, 2022. When confronted with this information, Mary indicates that she simply “forgot” about her prior surgery and prior treatment.

We would maintain that this is fraud in misrepresenting past medical history. In a case like this, testimony, or specific interrogatories, would likely be needed to elicit further details. It is difficult to believe that Mary “forgot” about a surgery from two months ago and “forgot” about her prior relevant treatment, which ended just before her work accident to the same knee, but the Judge of Compensation will ultimately decide on this issue.

Scenario 4: Bob says he got hurt in Aisle 4 of the grocery store, falling by the cereal boxes. He reported the injury right away and specifically says he fell by the Cheerio boxes. Security video shows Bob never even walked down Aisle 4 on the alleged date.  In fact, he never fell at all.

It would be our position that this is fraud. The fabrication of a work injury for the purposes of obtaining medical treatment, TTD, and/or permanent disability benefits, is fraud.

If Respondent obtains new information in a closed file, Respondent can re-open the case. For example, in a case where a prior Order Approving Settlement was awarded and there may now be fraud (for example, petitioner is observed doing very physical activities that he stated he could not do at the time of settlement), Respondents can file its own Re-opener application to lower the Award. Alternatively, Respondents can file a Motion to Vacate the Prior Order Approving Settlement. Finally, Respondents can file a Motion to Dismiss for Violation of the Workers’ Compensation Fraud Act. Respondents may also be able to negotiate a small Section 20 settlement, or dismissal, of a case where the employee committed fraud.

Advice to Employers in Dealing With Dependency Issues, Dependency Benefits, and Lifetime Benefits

Practical Advice in New Jersey Workers’ Compensation

What happens if an employee dies during the pendency of the open and ongoing workers’ compensation claim? The answer to this depends on a few factors. The first consideration is when the petitioner died (during treatment/ before permanency exams, after permanency exams, or after an Order Approving Settlement for permanency has been entered). The second consideration is whether the cause of death is, or is not, work related.

Below are various potential situations regarding dependency/ death cases, and how we would recommend handling each scenario.

Scenario 1: Petitioner dies from a cause not related to his workers’ compensation injury while he is under authorized treatment. Permanency exams have not yet occurred on either side. Who gets paid benefits, and what type of benefits are they owed?

It is our general position in this scenario that all that is owed is a contribution to funeral expenses as set forth in N.J.S.A. 34:15-12(e) (up to $5,000). In almost all cases like this, it is difficult for a petitioner to prove permanency without permanency examinations.

There are exceptions of course. In certain circumstances (such as a case involving a truly catastrophic accident), permanency could possibly be assessed without permanency exams, but these circumstances are quite rare. In most cases, permanency cannot be assessed without permanency exams where the employee is examined and provides their current complaints.

Since permanency benefits are based on current complaints as provided to permanency experts and testimony or a settlement affidavit, it is difficult to assess permanency without permanency exams on both sides having occurred, and without current complaints given to permanency experts. Generally, permanency cannot be attributed in a case where petitioner was under ongoing authorized treatment when he passed away.

We generally maintain that an employee is not entitled to permanency if the employee was still in treatment and had not medically plateaued, since he cannot sustain his burden of proof that he sustained permanency from the work accident.

Case Study/ Example: Logan is treating for a work-related tendinopathy condition. Treatment is progressing with physical therapy. Logan dies from a non-work related motor vehicle accident halfway through physical therapy. Does the employer owe permanency? No, because there is no way to prove permanency. Who could say that Logan would have had permanency when treatment was not even finished?

Scenario 2: Petitioner died from a cause not related to his workers’ compensation injury after permanency exams have occurred. Who gets paid benefits, and what type of benefits?

The difference between Scenario 1 and Scenario 2 is that in this scenario, permanency can be reasonably assessed and negotiated, based on the permanency exams that have occurred on both sides and the expert reports. Therefore, in this case, permanency can be assessed and negotiated between the parties.

Pursuant to N.J.S.A. 34:15(12)(e), when an employee dies from a non-work related cause after permanency exams, permanency payments are paid to the decedent’s dependents.

This is supported by the case law of Cureton v. Joma Plumbing & Heating Co., 38 N.J. 326 (1962), where the parties both obtained permanency reports with both experts assessing disability.

Scenario 3: Employee dies during the course of authorized treatment due to the work-related incident, and the work accident is the cause of death.

First, we note that a dependency claim can be filed when death is caused directly or indirectly from a work injury and it does not have to be the sole or primary cause of death.  As long as the work accident is a contributing cause, there can be a valid dependency claim. Also of note is the statutory time period in which a dependency claim must be filed under N.J.S.A. 34:15-51, which states that a claim must be filed within two years of the date of the accident. In a dependency claim, the dependency claim petition must be filed within two years from the date of death.

The compensation to a dependent (once the individual is determined to be a dependent, subject to N.J.S.A. 34:15-13(f)) is based on 70% of the employee’s wages at the time of death.

Dependency interrogatories should be served on any individual filing a dependency claim petition, to investigate the nature or the relationship between decedent and potential dependent and to confirm that the individual qualifies as a dependent as defined by Section 13. Employers should obtain a copy of the autopsy report and death certificate. Information should also be obtained regarding decedent’s treating physicians.

Scenario 4: Employee dies after an Order Approving Settlement is entered.

After an employee passes away, the remaining permanency payments are paid to the dependents. Cureton v. Joma Plumbing & Heating Co., 38 N.J. 326 (1962), referenced above, holds that any permanency benefits that were accrued but not yet paid at the time of death become part of the estate.

But ongoing un-accrued permanency benefits owed to an employee after the date of death are paid to dependents. An individual has no “dependents” until after he has passed away.

Case Study/ Example: Joan gets an Award of 15% permanent partial disability on January 1, 2022. The date of last temporary disability benefits was January 1, 2021, so one year of accrued permanency benefits exists. Joan’s accrued permanency benefits are paid over 90 weeks. Joan dies on January 2, 2022 from a non-work related cause. Who gets the permanency Award? The estate gets the portion of the accrued amount for the dates of January 1, 2021 through January 2, 2022. The statutory dependents get the future payments due after January 2, 2022.

Employers must always keep in mind when and how an employee passes away, to determine potential exposure, and the type of benefits that may be owed, and to whom the benefits might be owed.

The post Advice to Employers in Dealing With Dependency Issues, Dependency Benefits, and Lifetime Benefits appeared first on NJ Workers' Comp Blog.

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